Becoming the master of our finances is a pipe dream if we aren’t motivated and committed to making changes to our spending and savings habits. Hence, we must find what will keep us motivated and committed. Since we are all motivated by different things, the task of finding that motivation is up to each one of us — individually.
I didn’t find that motivation until I was was forty years old when I finally realized that financial security didn’t just happen — it took a commitment to developing an action plan and then following that plan.
Since I arrived at this realization rather late in life, I had to make some major changes to my spending and savings habits because I was running out of time accumulate the kind of money I needed to meet my financial goal so I could financially afford to retire at age 55.
There was one question I had heard years earlier that I never forgot:
- If your spending and savings habits for the next 5 years match those of the last 5 years, will you be any further ahead in 5 years than you are right now?
It became clear that if I didn’t make some drastic changes, the next 5 years would be a total waste of living. That is what my motivation was and continues to this day. You see, I have always had the fear of not having enough money to sustain me late in life when I could no longer earn an income by working. That absolutely terrifies me.
As a result, I developed a brutal budget (plan) to get me where I wanted to be. I made substantial cuts to my spending and started saving and investing 38% of my bring-home income.
I was so motivated that the saving part of the plan was easier than I thought it would be. Fear can be a great motivator. The spending part took some work … not because I couldn’t find the “fat” in my spending but because I had spending habits that were sabotaging my plan (budget). Hence, I started using using a mental calculation tool to determine if I really wanted to make a purchase. This mental calculation tool was so basic that it’s almost embarrassing. I asked myself these question based on my bring-home income:
- How many hours (or weeks or months) do I have to work to buy this?
This mental process greatly helped me break some wasteful spending habits and stopped me from making some financially bad decisions.
I share my story just to provide an example of what a driving motivation can do for anyone. I urge you to find what will motivate you … today and for years to come.